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Switzerland replaces Ordinance on Sanctions against North Korea and amends the Ordinance on Measures against Iran

The Swiss Government (Federal Council) today decreed a completely revised Ordinance on Sanctions against the DPRK, replacing the former one dated 25 October 2006, as amended. It hereby implements UN-SC Resolution 2270 (2016) and will enter into force today at 6pm CET.

The Ordinance provides for the following significantly tighter restrictions on the trade in goods, financial transactions, maritime and air transport and in the education sector:

In the financial sector, financial sanctions (the freezing of assets and a ban on the provision of finances) now apply to a wider group of persons. All funds and economic resources connected with North Korea’s nuclear and missile programmes have been blocked. This also applies, subject to one exception, to funds and economic resources owned or controlled by the government or the Korean Workers’ Party. The exception relates to funds required for the activities of diplomatic representations. Swiss banks are prohibited from opening branches, subsidiaries or agencies in North Korea, while existing branches and bank accounts in North Korea must be closed by 2 June, 2016. The same applies to branches of North Korean banks in Switzerland.

The ban on exports of luxury goods has been expanded to include additional products. Furthermore, all imports, exports and the transit of consignments of goods will now be checked by customs to ensure that they do not contain any prohibited products. The export and transit of goods bound for North Korea must be authorised in advance by the State Secretariat for Economic Affairs (SECO). In a new move, the export of goods that increase the operational capabilities of the North Korean armed forces has been prohibited. Also prohibited are the sale and supply of certain aviation fuels. The purchase of certain raw materials (coal, iron, gold, certain types of ore and rare minerals) from North Korea is prohibited.

In the sectors for maritime and air transport, various restrictions have also been introduced. These include a ban on charter and leasing contracts with North Korea related to aircraft and ships. Take-off, landing and overflight rights for aircraft will not be granted if there is reason to suspect that planes may be carrying cargo in contravention of the provisions of the ordinance.

In the education sector, citizens of the Democratic People’s Republic of Korea will not be permitted to take certain courses in subjects such as higher physics, advanced computer simulation or nuclear engineering. Military, paramilitary and police training for instructors, consultants and government officials from North Korea is also prohibited.

The Federal Council today also decided to amend certain aspects of the Ordinance on Measures against the Islamic Republic of Iran. Selected criteria regarding the licensing procedure for trade in dual-use goods have been adapted to facilitate transactions in light of the previously unintentional tightening of licensing criteria for the export of certain goods to Iran, compared to the time before the majority of sanctions against Iran were lifted effective 17 January, 2016. In parallel, annexes 6 and 7 with the lists of designated parties have been amended, reflecting recent changes to the EU’s corresponding lists. Both amendments come into effect today at 6pm CET.

As regards the licensing criteria for trade in certain dual-use goods, Article 3 of the Ordinance has been amended in that in the case of the dual-use goods listed in Annex 2 Section 2 of the Ordinance, Iran is no longer required to grant the right to examine the end-use of the relevant goods. Furthermore, the licensing procedure for these goods is simplified in that a licence no longer has to be issued by the interdepartmental export control group, but may be issued by SECO. Consequently, trade in these dual-use goods will again be assessed according to the same criteria as applied before the vast majority of sanctions against Iran were lifted early this year. In addition, the provision of services will be exempt from the licensing obligation in cases where SECO has already issued a licence for the export of the relevant goods. The dual-use goods listed in Annex 2 Section 2 of the Ordinance are also subject to licensing obligations in the EU.